RCI May Sell Blue Jays, Worth $1.65B+

Rogers Communications, Inc. (RCI) is exploring a sale of the Toronto Blue Jays and its minority stake in Cogeco Communications (TSX: CCA), as the company focuses on growing revenue and increasing margins within its wireless and cable divisions. While talks remain in the exploratory stages and no deal is imminent, RCI is seeking “surface value” for the Toronto baseball franchise; believing the team remains undervalued within the larger conglomerate. Should the company sell the team, you can still expect RCI to carry Jays games; CFO Tony Staffieri stated, RCI “would like to get the content without having the capital tied up on our balance sheet”. The Canadian communications giant acquired the Blue Jays in 2000 for $137 million.

Howie Long-Short: Forbes valued the franchise at $1.3 billion (based on projected revenue of $278 million); I say that’s far too low. The Marlins, which lost $60 million in ‘17, sold for nearly 6x revenue; though I certainly would argue the Jeter group overpaid. If you’re going to give Toronto the same multiple, which isn’t unreasonable when you consider the franchise was projected to turn a profit of $22.9 million in ’17, you must assume the sale price is going to be at least $1.65 billion. I should note that shares of RCI are up 27% YTD.

Fan Marino: Blue Jays television analyst Gregg Zaun was recently terminated by Sportsnet after several women accused him of “inappropriate behavior and comments”. It is unclear how many women came forward and what the behavior entailed. To Sportnet’s credit, he was terminated immediately following an investigation into his wrongdoing.